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spk00: Good day and welcome to the NOAA Holdings Limited second quarter 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchstone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Jimbo Wong, CFO. Please go ahead.
spk06: Jimbo Wong, CFO. Pan Qing introduced the financial information of Jibo to everyone, and the last is the interactive Q&A. Under the constant adjustment of supervision, the cost of integration in the financial industry has risen significantly. Integration is the lifeline of financial enterprises. After eight seasons of transformation, Luo Ya not only has zero growth in non-standard new products, but also completed 100% of the stock of new products in this season, which is pre- or normal withdrawal. Since this transformation, a total of 3.2 billion non-standard new products have been withdrawn and distributed to customers. For today's teleconference agenda, I will first report on NOAA's overall performance in the second quarter of 2021, the development of major business segments, and the progress of our key strategic projects. Next,
spk05: I will walk you through NOAA's changes and strategies from product-driven to client-oriented. Then we will invite our CFO, Mr. Ching Pan, to introduce the quarterly financial information, followed by a Q&A. With the continuous adjustment of regulations, the compliance cost of the financial industry has increased, while compliance has become a matter of life and death for financial institutions. After an eight-quarter transformation, NOAA has not only distributed zero new non-standardized private credit products, but also 100% completed the early or unscheduled redemption of private credit assets in our AOM in this quarter. Since the transformation, NOAA has exited the $32 billion of private credit products and completed distribution to clients. In the first half of 2021, with the promotion of the NOAA Triangle Service Model, we achieved the fastest growth in our diamond and black card clients since the transformation. With the strong support of our clients and the efforts of all NOAA employees, we have completed the transformation and maintained a year-on-year steady growth in the second quarter.
spk06: 2021年二季度,洛亚实现了销售金收入9亿元人民币,同比增长20.3%。归属股东的非GAAP金利润实现了3.4亿元人民币,同比增长7.5%。 At the end of June 31st, the profit was 80 million yuan, and the profit was 66.7% of the profit. In terms of core business data, the second quarter's net profit was 251 yuan, and the growth was 16.6%. The net profit of the private securities fund was 77.1 yuan, and the growth was 7.6%. The public fund added 93.8 yuan, and the overall market performance was 13.3%. 值得一提的是,哥菲管理的私募股权放到放基金,规模增长了64.7亿元人民币,是去年同期水平的2.5倍。我们今年在海外板块的表现也有不错的回升。海外板块净收入是2.3亿元人民币,同比增长23%。海外资产管理规模278.5亿元人民币,比2021年一季度末增长7.4%,占集团的总AOM的17.1%。 At the beginning of this year, we are once again determined to focus on high-end and ultra-high-end customers as our core customer group. I am very happy to report to you that as of June 30, 2021, Loya's diamond customers reached 6,386 people. In the first half of 2021, it increased by 12.3%. The number of black card customers reached 1,482 people. In the first half of 2021, it increased by 18.7%. This is the fastest growth of black customers since Loya's transformation. Our core customers' activity rate continues to rise. In the second quarter of 2021, Luoya's high-quality customer base, the active customer base, which includes public funds, exceeded 20,000 people, which increased by 38%. The active customer base in the traditional context increased by 39% in the second quarter, and the active customer base of public funds increased by 36%. Luoya strives to complete the transformation from product drive to customer-centered. Through the management process of the Super Star Project, In the past, wealth management was directed by product sales. Now, the change is to insist on selecting and identifying qualified investors, insisting on comprehensive and higher harmonious standards, and using the right way to meet the core financial needs of customers. In the wealth management headquarters, We established a customer identification system to carry out accurate customer identification, and proposed a customer management strategy and design plan. In the area, through the identification of all characters in the iron triangle, we select training and examinations to improve talent density, and thus realize the transformation from spray to low-end. With the customer as the center, more accurate and improved efficiency is our pursuit goal. Our first-tier talent continues to grow and add fresh blood. In 2021, Luo Ya increased the financial advisor's recruitment strength. In the second quarter of 2021,
spk05: NOAA reported net revenues of RMB 900 million, a year-on-year increase of 20.3%, while the non-GAAP net income attributable to shareholders reached RMB 340 million, a year-on-year increase of 7.5%. As of June 30th, NOAA has realized a total non-GAAP net income of RMB 800 million, representing 6.7% of the full-year guidance ahead of planned progress. In terms of core business data, transaction value in the second quarter was RMB 25 billion, up 16.6% year-on-year. Specifically, the transaction value of private secondary market funds was RMB 7.7 billion, up 7.6% year-on-year. Neutral funds were RMB 9.4 billion, down 13.3% year-on-year, affected by the overall market performance. It is worth mentioning that the AOM inflow of private equity funded funds managed by Gopher was RMB 6.5 billion, 2.5 times that of the same period last year. Our performance in the overseas sector also rebounded well this year. The net income of the overseas sector was RMB 230 million, a year-on-year increase of 23%. Overseas AOM was RMB 27.9 billion, up 7.4% over the end of the first quarter of 2021. accounting for 17.1% of the group's total AUM. At the beginning of this year, we once again decided to focus on high net worth and ultra high net worth clients as our core client base. I'm glad to report that as of June 30th, 2021, NOAA has 6,386 diamond card clients, an increase of 12.3% in the first half of 2021. 1,482 black card clients, an increase of 18.7% in the first half of 2021. This is the fastest growing quarter of diamond and black card clients since NOAA's transformation. Our core clients' activeness continued to improve year on year. In the second quarter of 2021, the total number of active clients, including mutual fund-only clients, exceeded 20,000. a year-on-year increase of 38%. The number of active clients excluding mutual fund-only clients increased by 39% year-on-year in the second quarter. The number of active clients of mutual funds increased by 36% year-on-year. NOAA is committed to the transformation from product-driven to client-oriented. Under the Supernova Relationship Managers Communications Quantitative Plan, The completion rate of the monthly communication between relationship managers and clients has reached 98%. By serving our core clients with the NOAA Triangle Service Model and through our digital transformation, we can provide suitable products and services to the right clients at the right time on the premise of better insight into client needs. In the past, relationship managers were guided by product sales. Now, the change is to adhere to screening and identifying accredited investors, adhere to comprehensive and higher compliance standards, and meet clients' key wealth management needs in the correct way. At the Wealth Management Headquarters, we on one hand established a client identification system to accurately identify clients, propose client business strategies, and formulate plans, while on the other hand, we improved the talent density in local branches through the identification, screening, training, and examination of various rows in the NOAA triangles, so as to realize the transformation from sprinkler irrigation to drip irrigation. Our client-oriented philosophy helps us serve our clients more accurately and efficiently. With new blood coming in, our frontline talents are undergoing the survival of the fittest process all the time. In 2021, NOAA ramped up the recruitment of relationship managers, adding nearly 200 new team members in the first half of the year. The turnover rate of elite relationship managers maintained an industry low of 1.7%. During the transformation, we have also made a new organizational design for our wealth management segment. From the past organizational structure of focusing on product promotion to today's new organization structure and business scenarios focusing on clients' experiences and needs, as well as customized solutions.
spk06: The capital management of other active funds has achieved a different level of growth. The management scale of the public market is 111.2 billion yuan, which has increased by 5.4% compared to the end of the first quarter. The management scale of private equity is 1277.4 billion yuan, which has increased by 4.8% compared to the end of the last quarter. Gofei's target strategic product is also an important three-point target of the group. As of July 16th, the positive line No. 1 and the balance line No. 1 have achieved investment performance, which is comparable to the market. Software-based products have also been launched. PE's KENTO and S67 funds are also about to be launched. S57 has completed the investment process in advance. The project is based on growth and maturity, and it is a project that preserves the layout of the market in the early stage. As with the foundation, Gefei's transformation is also centered on customers, and it has formed the leading team of 39 people. Xiaxia Fund Research Department, Hongguan Strategy Department, XINPING, and corresponding industry groups. In order to deeply understand the customer image of Gefei investment products, As of June 30, 2021, Gorgos AUM was genuinely $155.9 billion, stabilized and recovered. We have achieved the milestone of zero AUM of non-standardized private credit products,
spk05: We feel very lucky that this has also given us time and space for reform. Other actively managed funds have posted varying degrees of growth, of which the AOM of public securities was remaining 11.1 billion, an increase of 5.5% over the end of the first quarter. The AOM of private equity was remaining 127.7 billion, an increase of 4.8% over the end of the first quarter. Gopher's target strategy products are also among the key strategic focuses of the group. As of July 16, both Growth Fund 1 and Balanced Fund 1 have achieved the target investment return and outperformed the comparable market indices. Prudent products have also been launched. PE Co-Investment and F Fund Series 6 will also be launched soon. F Fund Series 5, focusing on growth and mature projects, while partially giving consideration to the layout of some early projects, has completed its investment ahead of the schedule. Like the group, Gopher's transformation is also client-oriented. Firstly, Gopher has established an investment research team of 39 members, who governs the fund research department, the macro strategy team, the credit rating department, and corresponding industry team. Gopher endeavors to delve into the client portrait of investing in Gopher products. Based on client needs, Gopher's portfolio management reports have been revised and optimized with more detailed and readable content, which have obtained positive feedback from clients, so as to drive the governance of portfolio management data and create a digitalized investment management process and system.
spk06: 今年下半年我们还将继续扩容3R的团队并提升客户活动的品质, One is to surround the customer as a center, to build multi-layered iron triangle. One AR plus one FR plus one SR, co-operative. AR as a customer relationship manager, responsible for customer opening up and for customer to do comprehensive asset configuration to maintain customer relationship. SR is a variety of product experts, to provide product introduction and solution for customers. FR is a delivery expert, to provide comprehensive program report and screenshot service for customers. R is from the group to the city, to implement real-time management. Each layer is different, from strategic planning to market planning. from quality control to regulatory control to improve the quality of delivery. The transformation we are promoting is to use customers as the center to do organizational design, to use survival as the baseline to build new business scenarios, to use data as the basis to identify and evaluate and distribute values, to use organizational ability construction to promote the landing of transformation. Transformation follows the process from the group to the business block to the nearest block, to determine the process of transformation at each stage and the key inspection points, and to clarify the map of the transformation. In terms of mentality, we have to stick to our customers' views and future views. We can't avoid standardizing our products. Our services must be more personalized, more considerate, and more from the customer's point of view. At the same time, we have to pursue long-term sustainable development. We have to give up short-term benefits. We have to live as the bottom line and strive to become the benchmark of the industry. We have to enter into the framework, methodology, and management in our ability. We have to organize our talents based on the value created by an employee to evaluate the value and distribute the value. ROYA's new subsidiary and recognition qualification system has been released and implemented. We built a professional positional qualification system that covers the whole life cycle of talent selection, use, and return, broadening the professional development channel of employees, and at the same time optimizing the salary system. Two-thirds of the key positional employees' salary is received by the salary, and the motivation and retention of core employees leads to full-time growth and development. In the mid-term employee experience survey in 2021, 83% of the employees believe that the company's target performance is clearer. The process of transformation also deepens our understanding of business. We provide core products around the core, high-end and ultra-high-end customers, provide services such as trust, insurance, family offices, and other services around customer motivation, engage in emotional marketing, hold various activities that meet customer needs, and organize transformation around the first line of the rich and the poor. And all of this is based on compliance and digitization capabilities. We believe that In the second half of 2021, we will continue to expand the AR, FR, FR teams and improve the quality of client marketing activities. First, we built
spk05: Multi-level NOAA triangles centered on clients with one account representative plus one fulfillment representative plus several solution representatives for collaborative teamwork. ARs. As account managers are responsible for client origination, providing comprehensive effort allocation services for clients and maintaining client relationships. FRs, as product experts, are responsible for providing clients with product introduction and solutions. FRs, as delivery experts, are responsible for providing clients with integrated portfolio reports and interpretation services. Second, we will implement matrix management from the group to local branches, making sure that each layer performs its own duties. from strategy planning to market planning, and from quality control to compliance quality control, so as to improve the quality of deliverables. The transformation we're implementing is to make organizational design with clients as the center, build new business scenarios with survival as the bottom line, identify, evaluate, and distribute value based on data, and promote the implementation of transformation with organizational capacity building. The transformation follows the method of easy first, difficult later, from the group to business segments. We will determine the transformation milestones and key inspection points at each stage and specify the transformation map. We will adhere to the philosophy of client and future oriented. Given the inevitable homogenization of standardized products, our services must be more targeted and client oriented. At the same time, We will pursue long-term sustainable development, give up short-term interest, and strive to become an industry leader in terms of compliant business operation, taking survival as the bottom line. We will input thinking framework, methodology, and management action for capacity building. In terms of human resources, we will base our evaluation on the value created and distributed by the employees. NOAA's new ranking and qualification system has been released and implemented. The ranking of employees has been completed. Through post-weighing, person-post matching, post-determination by responsibility, salary determination by post, post-salary linkage, etc., NOAA encourages two-way movement of rankings and post rotation. We have established a qualification system for professional posts covering the whole talent management lifecycle of selection, education, employment, retention, and retirement, broadening the career development channel of employees, and optimizing the salary system. Two-thirds of our staff in key posts have benefited from the salary increase this time, which contributes to encouraging and retaining core employees and driving the growth and development of all employees. In a midterm employee experience survey in 2021, 83% of employees believed that the company's objectives and missions are clearer than last year. The process of transformation has also deepened our understanding of the business. We provide financial products mostly for high net worth and ultra high net worth clients, provide family trust, insurance, family office, and other services around client motivation, conduct marketing events based on client emotions, hold various client activities in line with their needs, and make structure changes centered on empowering the front line, all of which are based on compliance and digitalization ability. We believe that with the planning of NOAA's new headquarters building, our client reception interface and visiting experience will be greatly improved in the future. We also plan to comprehensively improve and rejuvenate NOAA's brand image to show a side of NOAA with more youth, energy, and warmth, to better serve our clients and further empower our frontline.
spk06: 长期和可持续发展一直是诺亚重视的方向。 诺亚控股的可持续发展委员会搭建了集团的可持续发展组织架构,提升ESG的意思。 2021年5月,诺亚发布简单的宣言, 承诺秉持可持续运营的原则及其投身责任投资, 制定了短期中长期的碳中和的目标。 Long-term and sustainable development have always been held high by NOAA,
spk05: The Sustainable Development Committee of NOAA Holdings has established the group's sustainable development structure to enhance the ESG awareness. In May 2021, NOAA released a declaration on carbon reduction. We are committed to the principles of sustainable operation to actively engage in responsible investment and set short, medium, and long-term carbon neutrality goals. Currently, nearly two-thirds of NOAA's employees are female. I also signed the Women's Empowerment Principles of UN Women, creating opportunities for women to hold management positions and helping more women improve their economic ability. We look forward to a better tomorrow for sustainable wealth management and asset management industries. Now, our CFO, Mr. Panqing, will introduce to you the 2Q21 financial data in detail. Thank you.
spk02: Thanks, Sonia, and thank you, Chair Lady. Dear investors, analysts, good morning. Very happy to share with you another solid quarter with the strong growth achieved across revenues, profits, and transaction values over the comparable period from last year. We're also very excited to see the robust growth in our client activities, especially a record high growth in black card clients benefiting from the continuous implementation of our upgraded client service model and digitalization strategy. As of the first half of 2021, we also recorded non-GAAP NAT income of RMB 800 million, which was ahead of schedule to meet the full year guidance of RMB 1.2 to 1.3 billion. Another notable milestone in this quarter is that we have successfully exited and made full distributions to our clients all of the non-standardized single-counter party private credit products within our AUM, aside from the unsettled portion of Kempsey and Huishan products. That distribution totalled over RMB $32 billion since the transformation started in the second quarter of 2019. We have also successfully settled with over 70% of our clients affected by Kempsey incidents. With this overhand removed, we're pleased to see that our AUM has stabilized and entered into a stage with steady growth. Our efforts were also recognized by S&P Global Ratings, as S&P has recently lifted our rating outlook to stable for the next 24 months and affirmed our long-term investment-grade credit rating, BBB-minus. Like the Chairlady has pointed out, after eight quarters of challenging yet effective transformations, we have successfully turned the corner and are now heading towards a new stage of growth. Now, please let me walk you through more detailed results of this quarter. Net revenues in the second quarter were RMB 899 million, down 26.6 percent quarter over quarter, comparing to the last quarter, but up 20 percent year over year. One-time commissions were RMB 246 million, up 94.5% year-over-year, driven by increased client activity and transaction values, but also down 23.6% quarter-over-quarter. Recurring service fees were RMB close to 500 million, up 5% year-over-year and 5% quarter-over-quarter, driven by steady growth in our AUM. Performance-based income was RMB 122 million, up 34% year-over-year and down 70% quarter-over-quarter. Income from operations was RMB $335.4 million during this quarter, up 5% year-over-year and down 33.2% quarter-over-quarter, and the operating margin was 37.3%. Looking at a six-month period, we achieved net revenues of RMB $2.1 billion in the first half of 2021, 42% from the same period last year. This was mainly contributed by a 69% increase in one-time commissions due to a strong growth in transaction values, as well as higher than expected carry income achieved in the first half of the year. This impressive growth in our top-line performance was backed by robust client activities, especially among our black card and diamond card client group, Our black card clients grew 18.7% to 14.82% from 2020, and our core client group, including black and diamond card clients, comparable with the traditional private banking client group, increased by 13.5% from 2020, totaling 7,868 clients. This shows that our strategy to invest heavily on this initiative has been working well and will continue to sponsor the Diamond Black Card program to increase our market share of the ultra-high net worth tier. Our Black Card and Diamond Card clients typically contributed to over 70% of total transaction values as well as the AUM. Over the second half of 2021, we'll continue to release our strategic spending budget to better implement and improve our upgraded client service model and continue to focus on the retention and expansion of our core client group over the long term. Active clients in the first half also increased by 46% year-over-year to 32,945. And as a result, total transaction values, RMB 52.1 billion, a 16.7% increase year-over-year compared to the first half of 2020. Notably, transaction value of long-duration products such as private secondary market fund products was RMB 20.6 billion, up 10% year-over-year. In addition, the AUM of private equity fund funds products managed by Gopher also increased by 13.6% year-over-year. This increase in the volume of such products will also benefit us in the long term with steady sources of recurring service fees. Operating income for the first half was RMB 837 million, up 45% from the last year, and operating margin was 39.4% compared to 38.6% from the previous year. Compensation related expenses were RMB 977.9 million, up 40.6% from the previous year. Selling expenses also increased by 70% to RMB 182.3 million. The increase in compensation as well as selling related expenses was a reflection on efforts in talent acquisition as well as resumed marketing activities as of year 2020 was impacted by the outbreak of COVID-19 when the marketing activities was relatively limited. Non-GAAP net income for the first half was RMB close to 800 million, up 40% year-over-year. As for the first half's segmented results, net revenues from wealth management segment was RMB 1.5 billion, up 43.5% year-over-year, accounting for about 70% of total net revenues. Net revenues from asset management segment was RMB 526 million, up about 50 percent, 51.6 percent year-over-year. Total AUM increased by 1.2 percent from the previous quarter to RMB 155.9 billion, and we have revised the camps and related AUM adjusted for the amount that has been settled. Looking at our balance sheet, we have successfully closed the acquisition of a new office property, a new headquarter. And the related amount has been reflected in the property and equipment section. We financed the transaction with cash on balance sheet and still have a healthy cash balance of RMB $12.7 billion by the end of the quarter. The debt-to-asset ratio improved to 22.5% from 24.8% in the previous quarter and will continue to have no interest-bearing debt broke. We're also very excited to join the group of prestigious investors in the recently closed round of fundraising in iCapital Network, a market leader in global FinTech platform for alternative investments. Through this highly synergetic strategic partnership, we look forward to improving our overseas product offerings to include more high-quality global private equity and secondary market fund products for our clients. We also will work closely with iCapital to expand the international distribution channel for Gopher products. Moreover, I would like to highlight our continuous efforts in ESG initiatives. Aside from accomplishments mentioned by Chair Lady Wang, we're also establishing investment and product processes to incorporate criteria in relation to ESG. We hope to be able to offer more ESG-related investment products to our clients in the near future. In conclusion, with a successful completion for a standardized transformation that started in the second quarter of 2019, we're well positioned to enter into the next phase of business growth. We'll continue to invest in talent, technology infrastructure to strengthen our competitive advantage in client servicing and product diversity. So thank you everyone for listening. I will now open the floor for questions.
spk00: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time a question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question will come from Ethan Wang with CLSA. Please go ahead.
spk01: Thank you. After the Spring Festival, has the market changed? Has there been a second wave? Is there a large number of scams? Or is the trend maintained at a more normal level? And then the sales situation in July and August. If possible, I also hope to share this with us. This is the first question. And then the second question is about real estate products. Okay, so thank you management. I have two questions. The first one is a mutual fund. Since we've disclosed the transaction volume of a mutual fund, we want to understand more on the retention rate side. So have we seen any material changes in the retention rate or have we seen any large redemption from the second quarter? And if possible, can we get some color on the latest transaction volume on mutual funds in July and August so far? The second question is on real estate because recently regulators have temporarily halted the registration of residential real estate private funds. So, is that going to affect our real estate product sales in the future? Thank you.
spk02: Okay, thank you, Yixin. Well, the first question, I think we did notice for a sort of slightly slowing down on the mutual fund distribution, probably about 13 percent. But as to the question of the retention of such mutual funds, we only noticed about four days slower or shorter in terms of the retention period as of June 30th. But the total AUM mutual funds is still keeping a pretty stable balance. The reason being that I think how the clients purchased or allocated funds into mutual funds with NOAA is actually not so much to the volatility of the market, but rather the, you know, product-to-product sort of interval where they need to park their funds. So I guess the behavior is a little bit different from the retail market. But as you have pointed out, we believe the entire market on Asia has a At least cool down a little bit compared to the private period, prior period.
spk06: 房地产方面对我们没有什么影响, 因为我们最高峰可能有接近一千亿的地产基金, 但已经完全退出了。 我们剩下的都是一些股权类的, 还有就是上海的几个核心地段的合一写字楼吧。 那住宅类,我们平均退出的房地产IRR的是16%左右, 还是获得比较好的绩效,但是都已经...
spk02: So the impact on the residential type of property funds to us was very minimal. We did have at the peak, probably in 2016, we had about $100 billion in real estate-related funds, but we have exited fully from that $100 billion. investment funds starting in 2017. And currently, we don't have anything that in the residential property type of investments. The only thing we're still holding is in some of the equity type of real estate funds, as well as the holding of several office buildings in Shanghai.
spk01: Sure. Got it. Thank you.
spk02: Okay, thank you, Ethan.
spk00: Our next question will come from Emma Zhu with Bank of America. Please go ahead.
spk04: For the collection of securities listed overseas, many new economic companies' IPOs have been delayed. How does this affect the sales and withdrawal of our P&E products? And then just now, the management team also mentioned the impact of public fund, the impact of public fund collection and flow. So what is the impact of this on second-tier market capital products? Especially after the second quarter, we also saw this market surge, and then a lot of GVG companies' stocks have also adjusted significantly. So this, then, is it for our customer's whole uh uh settlement uh So I have two questions. The first one is regarding the distribution of private equity and private and hedge fund projects. because we have seen the tightening of IPO of ADR recently. So, it impacts the transaction value of your PE products as well as the access of your existing PE products. And recently, we see fixed market volatility. So will it also impact the distribution value of your hedge fund products? And the second question is about what is the settlement expense in second quarter. As we know, most of the canteen-related clients have been settled in fourth quarter last year. So what's the additional one in second quarter this year? Thank you.
spk02: Thank you, Emma. Let me get the first simple question out of the way. In terms of the settlement, second quarter, well, basically when clients came to us and asked for a little bit more time and negotiate for the settlement plan, usually, obviously, we'll cope with that. So there will be, here there are some settlements done during the second quarter. We had about additional 30 to 40 people that came to settle with us in the first half of the year. But obviously, we're not going to go ahead and do any broad offering or any new type of settlement plan. So they will come and take relatively similar settlement clauses to what we had offered in last year. So I'll hand the question to
spk06: I think first of all, these VCP products that we are doing now, they can go overseas, such as Hong Kong and the United States, or they can be listed on the A stock. This new policy to increase uncertainty is definitely objective. Now, I think no one can really evaluate how big the impact is. But we can also see that in the domestic market, from the customer's point of view, there is still a little bit of this. It is very obvious that the new economy is replacing the old economy. So the direction of customer investment is that our core customers in Luoya used to be in the traditional industry, including real estate, including some invisible champions. Now it's obvious that their industrial transformation still exists. They hope to gain a foothold in the new economy through investment. Even if there is a certain fluctuation in the market, the flow of funds has not changed fundamentally. This is what we see. The whole market is still growing. It's still because people don't invest in real estate. The stock market may be more active than it was in the past. Also, investment education, including non-bidding, has also been cleaned up. In fact, there are relatively few options. In our overseas business, we have an investment team in the U.S. stock market and in New York. So their products are very liked by customers. And we also see that although the Chinese stock market fell, the U.S. companies invested in our U.S. team So Emma, obviously, you know, the funds that you could also have exiting past
spk02: through oversea listing as well as domestic listing, but doubtless to say that the pressure recently of the tension obviously increased the uncertainty on the short-term outlook on the capital market. But we hold a view that it's the transformation from old economy to new economy that cannot be reversed. in terms of how the clients are allocating as well as placing their funds in the future, especially that a good portion of our clients actually probably came from the so-called traditional type of industry. So they have the urge as well as the demand to actually transform their own enterprise as well as through investing into new economies to increase their exposure into the new economy. So there may be short-term volatility in such investments, but I guess the long-term outlook of how they would place and allocate their assets into the new economy, that will not be reversed. Especially looking at how today's China market for people to invest, obviously the real estate is not an ideal target anymore. also as well as some of the so-called non-standardized products have been pretty much cleaned out by the regulators. So there isn't much option for people to make investments. That's why, you know, although there's short-term volatility, the equity market continues to stand very active in the recent period. And also, in addition, our U.S. products, especially the product that's being operated by our New York and Silicon Valley team are still delivering pretty strong performances by investments in companies in the States, as well as some of the real estate projects that are generating pretty strong cash flows for our clients. So their products are actually being very popular for the first half of the year, and we have mentioned that the income and also operations for the overseas portion of NOAA this year have actually seen a pretty strong recovery. Thank you, Emma.
spk04: Did that answer your question?
spk00: Again, if you have a question, please press star then 1. Our next question will come from Yo-Yo Sun with CICC. Please go ahead.
spk03: Okay, thank you for giving me the opportunity to ask this question. I am the analyst of the central company, Fan Youyou. First of all, congratulations to the company for achieving such a remarkable result. My first question is about our customer growth. Because we have seen this quarter like the core black card, diamond card, customer growth is very exciting. I would like to ask the management team about the specific reason behind our customer growth. So my first question is regarding the number of the clients. Would you please give more detailed explanations on the reason of the exciting growth of the Black Card and Diamond clients? And the second question is regarding the relationship managers. I wonder what's the number or, say, the percentage of our elite relationship managers. And we also see that the turnover rate of elite relationship managers was 1.7%, slightly higher than that of the previous year. And I wonder what's the reason behind that. Yeah, that's my question.
spk02: Thank you. So let me first try to break down the portion of the Elite RM. It actually takes part in about 30% of the total RM team for the second quarter. That's actually been pretty stable for the past quarters also. In terms of the growth in . Okay. I'll continue to also provide some insight from my perspective. Actually, I'm one of the project leaders in terms of the black card and diamond card program that's being established this year. And we have done, you know, a few things. Aside from the NOAA Triangle service model, as well as the digitalization. We actually made additional investments and continue will make additional investments in the second quarter, in the second half of the year to greatly enhance the benefit system and loyalty program in the black card and diamond card program. As you may have noticed in the past few quarters that we have had some very unique activities and also pretty exclusive activities for the Diamond Black Card clients, including the snowboarding with the world champion, who is actually a full-time employee of NOAA, as well as a sort of closed-door scenario to host a group of Black Card clients in the Summer Palace, things like that. I think it's actually part of a systematic effort to make sure that they not only receive the most suitable products in financial products, but as well as they will have a very unique client service experience with NOAA. So obviously, that type of investment helped our relation managers to be able to actually connect or reconnect with their core client group very effectively. And I think that's one of the strongest reasons that we see a pretty big push in terms of the growth in the core client group, which is the market share that, you know, everybody in the industry is targeted to increase. So we're very happy to see that the strategy is working and we'll continue to invest in that particular sector. 我想补充就说,可能经营理财是这个提法,可能我们也,也许是最后一次了,因为我刚才我花了很大的篇幅讨论,我们怎么样通过铁三角的模式来服务我们的核心客户,
spk06: One is that we are more focused on the digging, promotion and continuous service of high-end and ultra-high-end customers. The second is that we use the method of a team to serve customers, not a financial advisor. We think that it is difficult to meet the overall needs of customers in the way of serving customers one-to-one through a financial advisor in the past. This is what I want to talk about. Because through the iron triangle, the efficiency of our service Yeah, and Charlie, they made a very good clarification, and this is probably the last time we have this name so-called reference to elite relation managers, as that, you know, our service model to our clients have
spk02: transformed to a team of service providers to our clients in terms of know a triangle sort of service model so in the past that you know we completely rely on one person to make the service the product recommendation to our clients that era probably has passed we'll continue to push forward and you know, the model of servicing our client with a full team, with a product specialist, with a, you know, service specialist, as well as, you know, the chief relation managers who actually to look at a client's complete set of needs in terms of asset allocation and other service needs. So I think that's a very good clarification that we're probably, you know, moving toward a more complete service type with the team to our clients.
spk00: This concludes our question and answer session. I would like to turn the conference back over to Mr. Grant Pan, CEO, for any closing remarks.
spk02: Okay, I'm the CFO. By the way, thanks a lot for the promotion. And thank you, everybody. On behalf of the company, also Chair Lady Wan, thanks for your time. And I'm very happy and encouraged to see that, you know, after a quarter transformation, we are actually heading towards a new stage of growth and hope to continue to restore results for investors. Thank you.
spk00: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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